• Singapore’s 50 most actively traded companies in 2019 generated a 12% average total return and 6% median total return over the first 2 months of the final quarter for 2019. This brought their 11 month average total return to 27%, with a median total return of 12%.

• Companies amongst this 50 stocks that outpaced every S-REIT over the first 11 months of 2019, include Global Invacom, Rex International, AEM Holdings, Frencken Group, Hi-P International, UMS Holdings and Sunpower.

• All 7 stocks have incorporated technology advancements into their business and generated total returns in excess of 60% over the first 11 months of 2019. They also have international businesses and attracted net positive institutional inflows over the 11 months.

Singapore’s 50 most traded companies by turnover have outpaced the 43 trusts that make up the broad S-REIT Sector in the 2019 quarter-to-date. Together the 50 companies generated a 12% average total return and 6% median total return over the first 2 months of the final quarter for 2019. This compared to the S-REIT Sector generating a 1% average total return and 2% median total return.

REITs Performances Set a High Benchmark in 2019 

The FOMC press conference on Oct 30 provided insight that the Fed Reserve had completed its mid-cycle interest rates cuts, and it was not until Nov 28 that Fed Reserve commentary strengthened the rationale for the mid-cycle cuts. As a result, the performance of REIT Sectors (which had been the main beneficiary of the lower interest rate outlook) both in Singapore and abroad were mostly muted in October and November, compared to the preceding nine months.

Nevertheless, the trusts of the S-REIT Sector that had been listed for the duration still generated an average total return of 23% and median total return of 20% for the past 11 months. In Singapore, the Sector has seen record secondary fundraisings in 2019 totalling more than S$6 billion, with the 4 REIT IPOs ranking amongst South East Asia’s 5 biggest IPOs in 2019 by deal value. The 5 strongest REIT performances during the 11 months were Keppel DC REIT, Ascendas Hospitality Trust (Stapled Trust), Ascendas India Trust (Business Trust), Mapletree Commercial Trust and Sasseur REIT. 

7 Companies that Outpaced the Strongest REITs in 2019

While Keppel DC REIT generated a total return of 60% over the 11 months, 7 companies that were amongst Singapore’s 50 most traded companies for the duration all generated total returns in excess of 60%. These companies were Global Invacom, Rex International, AEM Holdings, Frencken Group, Hi-P International, UMS Holdings and Sunpower. All 7 stocks have incorporated technology advancements into their business, for instance: 

• Global Invacom is a fully integrated satellite communications equipment provider. Global Invacom has  six manufacturing plants across China, Israel, Malaysia, UK and the US.  Its customers include satellite broadcasters such as BSkyB of the UK and Dish Network of the USA and Data over Satellite providers including Hughes Network Systems, Viasat and Gilat Satellite Networks. Its revenue for 9MFY19 (ended Sep 30) increased 22% YoY  to US$104 million with net profit increasing by 107% to US$0.2 million. Click here for more.

• Aside from oil exploration interests in Oman and Norway, Rex International has developed proprietary technology. Rex Virtual Drilling is based on a set of computer algorithms for seismic data analysis to identify the presence of liquid hydrocarbons. This year Rex international monetised the Rolvsnes discovery and related assets in Norway (in 1QFY19 ended Mar 31), and farmed in and participated in the drilling on PL838 in the Norwegian Sea which yielded an oil and gas discovery (in 3QFY19). The Group is currently focusing its efforts on drilling an appraisal well in Oman in end-2019 and achieving oil production in 1Q-2020. Its most recent financial statements can be found here.

• AEM Holdings provides solutions in equipment systems; precision components and related manufacturing services across various industries. AEM Holdings reported net profit of S$13.7 million for 3QFY19 (ended Sep 30), a 20% YoY gain. The Executive Chairman noted that as the interconnected 5G and data-centric worlds gather momentum, the industry has become increasingly aware of the significance and benefits of system level testing. The company also noted that as the Group’s key customer introduces new products based on more advanced semiconductor nodes, AEM’s test handlers that are optimized for testing complex and sophisticated chips, witnessed an increase in demand. Its most recent financial statement can be found here.

• Frencken Group is a global high-tech capital and consumer equipment service provider. Its Mechatronics Division is a full service main supplier with a strong reputation as a problem solving technology partner for the manufacture of high precision industrial machinery and capital equipment to global Original Equipment Manufacturers. Frencken Group’s net profit for the 9MFY19 (ended Sep 30) rose 63% YoY and its most recent financial statement can be found here.

• Hi-P International provides one-stop technology solutions to customers in various industries. These include wireless telecommunications, consumer electronics, computing and peripherals, the Internet of Things, medical devices and industrial devices from product development, component manufacturing to complete product assembly. Hi-P International’s net profit for the 9MFY19 (ended Sep 30) rose 3% YoY and its most recent financial statement can be found here.

• UMS Holdings is a one-stop strategic integration partner providing equipment manufacturing and engineering services to Original Equipment Manufacturers of semiconductors and related products. Its revenue for 9MFY19 eased 10% YoY to S$91.5 million mainly due to 15% decline in semiconductor segment sales. Its most recent financial statement and outlook for the semiconductor industry can be found here.

• Sunpower is an environmental protection solutions specialist in proprietary energy saving and clean power technologies, with a strong focus on expanding into anti-pollution investment projects. The Group posted 47% YoY growth in underlying net profit for its 9MFY19 (ended Sep 30) attributed to its Manufacturing & Services segment and Green Investment businesses. Sunpower has rapidly expanded its Green Investment business in recent years by leveraging on its existing core technologies of high-efficiency heat transfer, long distance heat insulated steam distribution, energy saving and ultra-low emission clean power generation. Its most recent financial statement can be found here.

The 50 SGX-listed companies which have been the most actively traded over the first 11 months of 2019 have been recipient of S$1.2 billion in net institutional inflow, and are tabled below.

Source: SGX, Thomson Reuters (Data as of 30 Nov 2019)
^* information on pre-conditional exit offer can be found here.
^{^} denotes SGX Watch-list in June 2018. In the case of Global Invacom the stock joined the Watch-List under the Minimum Trading Price (“MTP”) Entry Criteria.